Could this day be any sadder?

Sorry for the title there, but my day was not a cheerful one at all. First of all, DH has some kind of stomach bug (I hope) and hasn't been able to keep anything (including the Lithium) down all day. He's really dizzy and I haven't seen him this miserable in years. I'm worried that it's either a side effect of the larger dose of Lithium, or even if it's not, he basically didn't get ANY Lithium today, because he threw it all up, so what will tomorrow be like? And how terrible would that be if, the Lithium is really making him better but he can't take it because it makes him sick? I don't think I could stand it.

And today was the "open house" for my long-time veterinarian. (See post here for more information).
I found out why he's leaving, and I completely understand. He wants to live in the country. That's it in a nutshell. He's going to be a country vet, large and small animals of all kinds. I hope his small town recognizes him for the gem he is. I almost started to cry when I started talking with him--my voice had that tremble in it....I was so close to losing composure and that would've been rather embarrassing with a gazillion other people there, too....he seemed genuinely happy to see me, and he looked like he was going to give me a big hug, too, but since I'm on the shy side and stuff, I didn't want to be wrong and majorly overstep some boundary, so I held out my hand instead. I had managed to take two really cute pictures of Charlie Meow and put them in a card for Dr. S., along with a letter kind of telling him the same things I told you in the other post, and that I know a person has to follow their dreams...I'd like to think he'd send me a thank you or something for the pictures, but I don't really know what the etiquette is for this sort of thing, so maybe not. I got done talking with him and went out to my car, I cried half the way home (and it's a 90 mile trip). I have talked to other people who understand what I'm feeling, but I'm not even sure I understand it. I mean, I've gone for MONTHS and maybe even a year or two once or twice without ever seeing him or talking to him, so why am I so upset about him leaving to follow a dream? After all, it's the same dream I had. I moved from the city to the country shortly before DH and I got married. And I would never go back (most days anyhow). So I really don't completely understand why I'm so down, but I am.

And if that wasn't enough, DD had another tantrum because she won't be allowed to go to her "real mom's" tomorrow. She told me I'm not her mom and I need to quit acting like it. And I told her that wasn't going to change things, she wasn't going and that was that. So she picked up the phone to call her "real mom" to tell her what a bit** I am and I told her that if she made that phone call, she'd be guaranteed to not be able to see her "real mom" at all tomorrow. (We had planned a supervised visit for a couple of hours.) I just want to tell her to shut her stupid mouth. (ok, yes, I'm still mad.) But of course I didn't. I just told her I love her and it is not her job to decide things like that, it is up to the grown ups. And she says "You don't even care about what's good for me! You always say you want what's best for me, but I want to go there and you won't let me!!!" And I said, "When you were 8, what you wanted was not always what was right for you and sometimes it still isn't. Sorry." And I know that her bio mom is feeding her all sorts of ideas about how mean we are, and it tears DD apart and she takes it out on us. But I'm still mad, LOL....it just didn't go well with the "sad" that was already there from earlier.
And of course, DH couldn't stand up for me, because he was busy being sick. Jim just shook his head after she shut the door in my face and said "I don't know how you stayed so calm. I wanted to smack her just listening to her talk to you like that." Argh.

And THEN....if all that wasn't enough, I checked my favorite local news website and learned that my favorite weatherman was abruptly terminated in a "reduction in force" by the TV station. First my vet, now my weatherman.....ok, well, I don't really have any ownership of either of them but jeez.....when it rains, it pours, right? (weather cliche intended, LOL)

Overstock CEO really knows what's going on....

Here is a link to a post made by the CEO of Overstock.com. He explains things very very well, probably the best explanation of our country's financial "house of cards" that I've heard lately. I know this is a blog dedicated to Bipolar, but that's not the only thing I pay attention to!

Link to actual article

Umbrellas, Casinos, and the End of the World as We Know It
February 15th, 2008 by Patrick Byrne, Overstock.com

I will begin this preamble to the subject systemic risk with two quotes from Warren Buffett (by quoting him I do not mean to imply his support in these efforts of mine):

Of excess leverage in the system, Mr. Buffett has said, “No one knows who’s been swimming naked until the tide goes out.”
Mr. Buffett calls derivatives, “financial weapons of mass destruction.”
I would like to explore the meaning of this in the context of unsettled trades in our nation’s settlement system.

Mark Twain said, “A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it begins to rain.”

Consider this scenario:

I loan you an umbrella.
You use that umbrella as collateral to borrow 5 more from someone else.
You take the 6 umbrellas and loan them out to your 6 brothers.
Each of your six brothers now has one umbrella. Each uses that umbrella as collateral with which to borrow 5 more. Each brother now has 6 umbrellas, and loans them out to 6 of his friends.
Each of those (6 brothers) X (6 friends each) = 36 friends now has one umbrella. Each uses that umbrella as collateral with which to borrow 5 more.
There are now 6 X 6 X 6 = 216 umbrellas in all.
It starts to rain.

I go to you and say, “I need back that umbrella I loaned you.”
You say, “But that was collateral for the 5 I borrowed! If I have to return your umbrella, I’ll also have to return the other 5 I borrowed using your umbrella as collateral.”
So you go to your six brothers and say, “I need those six umbrellas back!”
Each brother says, “But I used that umbrella as collateral for 5 more!” So they go out to get each of their six umbrellas back by going to their 36 friends and saying, “We need our umbrellas back!”
And so on and so forth. It is easy to see how this situation, where balancing upon one umbrella were 216 borrowed and reborrowed umbrellas, could unravel in a chain reaction of “unborrowing” and returning of umbrellas.

Remove “umbrellas” in the above example and replace it with “dollars,” and you get a good image of excess leverage in our financial markets, and one of systemic failure as well.

How could the government stop this collapse? In the umbrella example, the government would take truckloads of umbrellas and inject them into the umbrella market (perhaps by loaning them out at low rates) so as to slow down and even stall that chain reaction. In the example of our financial system, the government would do it by taking truckloads of dollars and injecting them into the capital market.

This is exactly what the government has been doing for over a year. The broadest measure of the money supply is called, “M3.” The government reported the rate of change in M3 since 1959. After reporting M3 for 47 years, in March 2006 the government stopped disclosing M3. From other numbers that are disclosed by the Federal Reserve, however, it is possible to back into M3. An economist named John Williams does just that on the Shadow Government Statistics website. According to Mr. Williams’ calculations, the rate of expansion in M3 has reached 16.7% - higher than at any time since they started reporting it (the last time it reached 16%, Nixon reacted by instituting wage and price controls).

That is problematic because (very roughly speaking) the growth in money supply will equal inflation plus growth in US productivity (along with other factors like velocity and number of transactions: that is why I say “roughly). According to the Fed, productivity is growing at just under 3%. If money supply growth stays gunned at 16%, underlying inflation will heat up over 10%, at which point the dollar will crack some more, at which point interest rates will be hiked into the high teens in order to tempt foreigners to continue loaning us money to subsidize our fiscal and current account deficits, at which point we will be thrust into an inflationary recession that makes the early 1970’s look like a Sunday picnic.

That is to say, massive amounts of liquidity are being injected into the US financial markets to keep it from imploding. This will lead to inflation (”Inflation is always and everywhere a monetary phenomenon,” wrote Milton Friedman and Anna Schwartz) then a recession.

Or not, if, as some believe, M3 is too volatile to worry about.

The “rain cloud” which was the proximate cause of this situation was the home mortgage crisis that began to be exposed in the summer of 2007. People bought homes with borrowed money for which they signed IOU’s (“mortgages”). Those IOUs were aggregated and resold, chopped up, packaged and resold again to firms which borrowed even more on top of them. Unfortunately, since everyone in the chain made money from fees charged for that aggregation, chopping and packaging, they had incentives not to notice that many of the folks underneath it all were signing IOU’s they would not be able to repay. Once they stopped paying their mortgages (i.e., once those “umbrellas” started to be recalled), the system started to collapse on itself. A coordinated effort by the largest central banks in the world injected money into the financial markets to stop a runaway implosion such as that described in the umbrellas example above.

There are numerous articles out there explaining the mortgage crisis in far greater detail than the above. I present this explanation for three reasons only.

The first is to provide the lay reader with the mental imagery by which to conceive of a systemic collapse.
The second is so that I could point out that the mortgage crisis was the rain cloud that triggered the current crisis, but it may not be the only rain cloud. Lots of storms have more than one rain cloud.
Third, the rain cloud is not the same thing as the underlying situation. It is merely the trigger which has caused an unhealthy underlying situation to manifest. It is important to understand not just the trigger but also that underlying situation: tremendous amounts of systemic leverage are, in the end, a giant confidence game (in the most literal sense), and if that confidence is disrupted the system can implode. What disrupts that confidence may be nothing more than a sudden, broad realization that more leverage has accumulated than has been generally understood, perhaps by accumulating in such a way that no one recognized it for what it is. I will argue in future posts that this is precisely what unsettled trades in our stock settlement system create.
Again, that third point is key: recognize that the mortgage crisis, while real, is a trigger but not the underlying situation. The dancer is different than the dance.

I would like to switch metaphors now, to discuss derivatives.

I ask you to imagine a special casino. On the ground floor, it looks like a normal casino. There are 100 people standing around playing craps, roulette, and blackjack. They each brought $10,000 so there is $1 million of betting on the first floor.

On the second floor, however, there is another casino. In that casino, people are watching television screens showing people gambling on the first floor. In the second floor casino, people bet each other on who they think is going to win and lose on the first floor. All the really big players are in that second floor casino, and they are betting hundreds of millions of dollars of action on various people in that first floor casino. Their outcomes are “derivative” of the outcomes on the first floor. A roll of the dice on the first floor that loses someone $100 may create tens of thousands of dollars of losses on the second floor (and if there is a third floor where people are placing even bigger bets on the outcomes on the second floor….)

I will argue that unsettled trades in the financial system bear the characteristics of such derivatives. However, they present a special kind of derivative. If you and I walk into the first floor casino and bet on whether the next roll of the dice is a 7 or not, no amount of betting on our part can affect the underlying event. Similarly, the underlying event will not be affect by any amount of betting by the people above us on the second floor (or by betting on them by people on the third floor).

Unsettled stock trades, however, can affect the underlying events upon which they are a bet. In fact, unsettled trades resulting from “the option market maker exception” are often the by-product of deliberate efforts to affect those underlying events. When an underlying event that someone deliberately affects is a stock price movement, it used to be called, “manipulation” (and was also called “illegal” until Wall Street captured the SEC, at which time it became known as, “a hedge fund business model”).

Because unsettled trades have this property of affecting the underlying events upon which they are a bet, they are derivative contracts with an especially nasty twist.

I tell you, that guy Buffett will go places.

PS Again, because I wish neither to imply support for or endorsement of my views, I am going to give one additional quote, without comment. In May, 2007 Messieurs Buffett and Munger were asked to comment on the issues I am raising here in Deep Capture. Mr. Munger’s response was as follows (page 6): “Those delays in delivering sometimes reflect tremendous slop in the clearance process. It is not good for a civilization to have huge slop. Sort of like how it isn’t good to have a lot of slop in nuclear power plants.”

Scary economic stuff from the econ geek in me

The story below is one that I read couple of days ago, but the statements made in it, coming from mainstream media, make me want to share this with everyone, even though most people who know me just end up rolling their eyes and saying "Oh, there she goes again with all that financial mumbo-jumbo"....so if you're not interested in economic stuff, I'm very sorry!!!

http://www.msnbc.msn.com/id/21939337

New wave of mortgage failures could create a nightmare economic scenario
By JOE BEL BRUNO
AP Business Writer
The Associated Press

NEW YORK - When Domenico Colombo saw that his monthly mortgage payment was about to balloon by 30 percent, he had a clear picture of how bad it could get.
His payment was scheduled to surge by an extra $1,500 in December. With his daughter headed to college next fall and tuition to be paid, he feared ending up like so many neighbors in Ft. Lauderdale, Fla., who defaulted on their mortgages and whose homes are now in foreclosure and sporting "For Sale" signs.

Colombo did manage to renegotiate a new fixed interest rate loan with his bank, and now believes he'll be OK _ but the future is less certain for the rest of us.

In the months ahead, millions of other adjustable-rate mortgages like Colombo's will reset, giving them a higher interest rate as required by the loan agreements and leaving many homeowners unable to make their payments. Soaring mortgage default rates this year already have shaken major financial institutions and the fallout from more of them, some experts say, could spread from those already battered banks into the general economy.

The worst-case scenario is anyone's guess, but some believe it could become very bad.
"We haven't faced a downturn like this since the Depression," said Bill Gross, chief investment officer of PIMCO, the world's biggest bond fund. He's not suggesting anything like those terrible times _ but, as an expert on the global credit crisis, he speaks with authority.

"Its effect on consumption, its effect on future lending attitudes, could bring us close to the zero line in terms of economic growth," he said. "It does keep me up at night."

Some 2 million homeowners hold $600 billion of subprime adjustable-rate mortgage loans, known as ARMs, that are due to reset at higher amounts during the next eight months. Subprime loans are those made to people with poor credit. Not all these mortgages are in trouble, but homeowners who default or fall behind on payments could cause an economic shock of a type never seen before.

Some of the nation's leading economic minds lay out a scenario that is frightening. Not only would the next wave of the mortgage crisis force people out of their homes, it might also spiral throughout the economy.

The already severe housing slump would be exacerbated by even more empty homes on the market, causing prices to plunge by up to 40 percent in once-hot real estate spots such as California, Nevada and Florida. Builders like Chicago's Neumann Homes, which filed for bankruptcy protection this month, could go under. The top 10 global banks, which repackage loans into exotic securities such as collateralized debt obligations, or CDOs, could suffer far greater write-offs than the $75 billion already taken this year.

Massive job losses would curtail consumer spending that makes up two-thirds of the economy. The Labor Department estimates almost 100,000 financial services jobs related to credit and lending in the U.S. have already been lost, from local bank loan officers to traders dealing in mortgage-backed securities. Thousands of Americans who work in the housing industry could find themselves on the dole. And there's no telling how that would affect car dealers, retailers and others dependent on consumer paychecks.

Based on historical models, zero growth in the U.S. gross domestic product would take the current unemployment rate to 6.4 percent. That would wipe out about 3 million jobs from the economy, according to the Washington-based Economic Policy Institute.
By comparison, in the last big downturn between 2001-03 some 2 million jobs were lost, according to the Labor Department. The dot-com bust early this decade decimated the technology sector, while the Sept. 11, 2001, terror attacks hurt the transportation and allied industries. Economists said the country was officially in recession from March to November of 2001, but the aftermath stretched to 2003.

There is increasing evidence that another downturn has begun.
Borrowers who took out loans in the first six months of this year are already falling behind on their payments faster than those who took out loans in 2006, according to a report from Arlington, Va.-based investment bank Friedman, Billings Ramsey. That's making it even harder for would-be buyers to get new mortgages _ a frightening prospect for home builders with projects going begging on the market, and for homeowners desperate to unload property to avoid defaulting on their loans.

Meanwhile, the number of U.S. homes in foreclosure is expected to keep soaring after more than doubling during the third quarter from a year earlier, to 446,726 homes nationwide, according to Irvine, Calif.-based RealtyTrac Inc. That's one foreclosure filing for every 196 households in the nation, a 34 percent jump from just three months earlier.

Such data suggests more Americans could lose their homes than ever before, and those in peril are people who never thought they'd welsh on a mortgage payment. They come from a broad swath _ teachers, pharmacists, and civil servants who were lured by enticing mortgage terms.
Some homebuyers gambled on interest-only loans. The mortgages, which allowed buyers to pay just interest at a low rate for two years, were too good to pass up. But with that initial term now expiring, many homeowners find they can't make the payments. The hopes that went along with those mortgages _ that they'd be able to refinance because the equity in their homes would appreciate _ have been dashed as home prices skidded across the country.

"It's been said a lot of people have been using their homes as ATM machines," said Thomas Lawler, a former official at mortgage lender Fannie Mae who is now a private housing and finance consultant. "The risk has a lot of tentacles."

This example illustrates the distress many homeowners are in or will find themselves in: A subprime adjustable-rate mortgage on a $400,000 home could have payments of about $2,200 a month, with borrowers paying 6.5 percent, interest only. When the teaser period expires, that payment becomes $4,000, with the homeowner paying 12 percent and now having to come up with principal as well as interest.

Minneapolis resident Chad Raskovich found himself in a such a situation. He hoped _ it turned out, in vain _ to gain more equity in his home and that a strong record of payments would enable him to secure a better loan later on.

"It's not just me, it's a lot of people I know. The housing market in the Twin Cities has dramatically changed for the worse in the years since I purchased my home. Now we're just looking for a solution," he said.

Colombo, who lives in the planned community of Weston just outside Ft. Lauderdale, said the reset on his home would have "destroyed' his financial situation. He went to Mortgage Repair Center, one of hundreds of debt counselors trying to bail out desperate homeowners, to work with his lender.

"But many people in my neighborhood didn't get help, and some have literally just walked away from their homes," said Colombo. "There are over 133,000 homes on the market in Broward-Miami-Dade counties, and some of them were actually abandoned. People in this situation don't like to talk about it, and end up getting hurt because they don't."

Many Americans are unaware that a borrower defaulting on a loan can have an impact on everyone else's well-being and that of the nation. After all, the amount of mortgages due to reset is just a fraction of the United States' $14 trillion economy.

But the series of plunges that Wall Street has suffered in past months prove that no one is immune when mortgages turn sour.

Today's financial system is interconnected: Mortgages are sold to investment firms, which then slice them up and package them as securities based on risk. Then hedge and pension funds buy up such investments.

When home prices kept rising, these were lucrative assets to own. But the ongoing collapse in housing prices has set off a chain reaction: Lenders are tightening their standards, borrowers are having a harder time refinancing loans and the securities that underpin them are in jeopardy.

This has resulted in more than $500 billion of potentially worthless paper on the balance sheets of the biggest global banks _ losses that could spill into the huge pension and mutual funds that also invest in these securities and that the average worker or investor expects to depend on.
There's more pain left for Wall Street: "We're nowhere close to the end of the collapse," said Mark Patterson, chairman and co-founder of MatlinPatterson Global Advisors, a hedge fund that specializes in distressed funds.

"I just assumed banks could stomach these kind of losses," said Wendy Talbot, an advertising executive when asked about the subprime crisis outside of a Charles Schwab branch in New York. "I guess you don't really pay attention to things until your forced to. ... You put out of your mind the worst things that can happen."

The subprime wreckage could dwarf the nation's last big banking crisis _ the failure of more than 1,000 savings and loans in the 1980s. The biggest difference is that problems with S&Ls were largely contained, and the government was able to rescue them through a $125 billion bailout.

But this situation is far more widespread, which some experts say makes it more difficult to rein in.

"What really makes this a doomsday scenario is where would you even start with a bailout?" housing consultant Lawler asked.

Sen. Charles Schumer, D-N.Y., a key member of Senate finance and banking committees, said borrowers are the ones who need relief. The playbook to bail out the economy would not be applied to the banks and mortgage originators, but money could be funneled through non-profit organizations to homeowners that need help, he said in an interview with The Associated Press.
"There is a worst-case scenario because housing is the linchpin of our economy, and more foreclosures make prices go down, that creates more foreclosures, and creates a vicious cycle," Schumer said. "You add that to the other weakness in the economy _ on one end is the home sector and the other is the financial sector _ and it could create a real problem."

He also believes Federal Reserve Chairman Ben Bernanke should do more to help the economy. Bernanke said in recent comments he has no direct plans to bail out the mortgage industry, but to instead offer relief through cheap interest rates and further liquidity injections into the banking system.

There's also been talk of letting government-backed lenders like Fannie Mae and Freddie Mac buy mortgages of as much as $1 million from lenders, pay the government a fee for guaranteeing them and then turn them into securities to be sold to investors. This would extend the government's support, and its exposure, to the mortgage market to help alleviate stress.
Either way, the impact of a fresh round of subprime losses remains of paramount concern to economists _ especially since there's little certainty about how it would ripple through the U.S. economy.

"We all know that more hits from these subprime loans are coming, but are having a devil of a time figuring out how it will happen or how to stop it," said Lawler, who was once chief economist for Fannie Mae.

"We've never been in this situation before."
Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Is George Bush mentally ill? (Warning: Democratic slant)

Hmmm.... an interesting thought, isn't it??? And one that has been apparently considered by a number of people. It never really entered my frame of reference, despite my current life revolving around mental illness. I mean, how did he get to be president, if he's "not quite right"???

The thing that got me wondering about this was this article from CNN: Kucinich Questions Bush's mental health state over Iran. I happened to notice that, and questions started to pop into my mind.

I need to explain that while I tend to vote Democrat, I have never been someone to criticize the President. When Reagan was president, and even George W.'s father, I accepted that while their core beliefs probably weren't the same as mine, they would do their best to help the country and its citizens succeed. I have consistently tried to view the current administration in the same light and have found it impossible. I could go on a long rant about the things I vehemently disagree with, but I assume that after all this time, most of you have already formed your own opinions as to this issue. In a nutshell, when an educated (and presumedly powerful) person cannot pronounce the word "nuclear" correctly, it casts a shadow on everything else they do! (By the way, I strongly support the troops, just not the "reason" they are there. I don't think we can just up and end the war, there are too many things that are "half done", but I do think we should not have gone there in the first place, if you're wondering where I stand on that).

Anyhow, I started to try to examine Mr. Bush in terms of bipolar, and it just didn't fit. He doesn't seem to have the right symptoms. And I am not one to accept the fact that "Mr. Kucinich thinks he's crazy, so he must be, right?" I don't know much about Mr. Kucinich, truth be told. But it seemed like a logical explanation for a lot of things I don't understand. So I started to look into others who have been questioning Mr. Bush's mental state, and I found this:
Is George Bush insane?

And you know, it did make sense, even if it is a slightly outdated article.

And then I found this:
The neuropsychology of George W. Bush

And suddenly the whole "noo-kee-lar" thing was clear to me.

The only thing that doesn't make sense to me is why is he our president???? A person who won't or can't read??? Or write??? Who has all these things done for him so that he can have power???? I am postively flabbergasted. I don't know what to say. Like I said above, it had never even occurred to me that maybe there was more than just a person I don't particularly like, whose ideas I find repugnant. After reading a little, I am just stuck wondering what has become of our country, that enough people could vote for him, that he could be our leader? But then I didn't know either.

And who is really running the show, anyhow, if he isn't reading and isn't writing, and can't speak well?

Oh, and just for fun, and in case you still have doubt.....
Famous Bush Quotes

Thoughts on the California Wildfires

This blog would be remiss if I did not mention my concern and sadness for the people of California who are living through these horrifying wildfires. The more I read, the more I see on TV, the more real it becomes. I have to confess, that at the outset of these fires, I heard the reporting on the news about "California wildfires" and I just thought, "Oh, well, they go through that every year". But the more I see and hear about these fires, it becomes clear that they are not an "every year" or even an "ever seen before" occurrence. A newspaper here in MN is now reporting that over a million people have been evacuated. I don't remember ever hearing about anything like that before in my life, except possibly Hurricane Katrina. For anyone interested in up-to-the-minute news on the fires and evacuations, click here.

Then I read this story about the brave rescuers who are trying to save pets and livestock. I couldn't even read it to the end. My first thought was "I can't imagine leaving my animals behind in a situation like this". My pets would be the first and only things I thought to grab. But I have heard so many tales about how people had to just drop everything and go, I suppose you do just that and worry about your pets later. I've never been in that kind of situation, so I have no idea what it's like. Undoubtedly it's something that will affect these people for the rest of their lives, even if their houses escape unscathed, so I'm certainly in no position to second-guess them.

I also saw a comment posted to a news story that said something like this: "Nobody cares about all those rich so-and-so's in Malibu, they've got insurance, let 'em burn". And I was appalled. But I have heard similar things from others as I've discussed these fires, so I know it's not an altogether uncommon sentiment. I just can't believe that anyone would fail to have empathy toward their fellow humans because "they're rich". After all, my family is not "rich" by any stretch of the imagination--I'm not sure many people would even regard our income as "middle class" right now, but I (and my family) am undoubtedly "richer" than quite a number of people. And I have insurance. But the prospect of losing my home, my woods, my neighbors, my heirlooms, my memories, that has absolutely nothing to do with how "rich" I am, it makes me want to cry for these people, whether they are millionaires or the housekeeper that scrubs the toilets. And it makes me want to cry for the people who respond with such cruelty. I hate the thought that I am even walking on the same planet as someone as full of hate as that.

Anyhow, if you are reading this and are of the praying type, maybe adding California into those prayers wouldn't hurt? They're added into mine, for sure.